New York City transit pact: adding up the hidden costs

The price tag for settling the 11-day new York City transit strike is far greater than the labor contract alone indicates. Although the state will have to come up with the money to pay for the contract, since the Metroplitan Transportation Authority is a state agency, the pact with the transit workers is expected to influence upward the wage demands New York City municipal worker unions. This occurs at at time when the city was well on the road to financial recovery, according to key fiscal watchdogs.

The 2 1/2-year contract calls for increases of 9 percent the first year and 8 percent the next year, with a 3 percent cost-of-living increase in the last six months. A series of efficiency improvements also were agreed upon, including a reduction in paid "break time" and a lower starting wage for new employees.

The exact overall overall cost of the settlement to the state is still being debated, but estimates range from $220 million to $280 million. The tentative accord is producing these repercussions:

* New York Gov. Hugh Carey is seeking to keep his promise to save the current 50-cent fare. But most close observers say a hike of 10 to 15 cents at the very least is a foregone conclusion, with an adverse impact on many of the city's poor.

* A political rift has developed between Governor Carey and New York City Mayor Edward Koch over the accord because the mayor maintains the governor should have driven a harder bargain with the deserved a better settlement."

Governor Carey was under enormous pressure from the state's business community, centered in New York City, to end the strike. So was Mayor Koch. The difference, Koch aides say, is that the governor didn't have to look beyond the transit settlement to June 30 and come up with perhaps another $1 billion to pay for municipal wage hikes.

* New York State has to pay for the settlement at a time when the Carter administration is slicing aid to the states in order to balance the federal budget.

Mayor Kock is emphasizing that the transite agreement in no way sets the pattern for what the city's 250,000 municipal workers can hope to achieve when their contracts run out June 30.

Victor Gotbaum, executive director of the American Federation of State, County, and Municipal Employees union here, disagrees, saying the city's union hope to do even better than the settlement the transit union workers won.